Moody's puts Aston Martin on watch for downgrade

Lights are reflected on the hood of the Aston Martin Virage Coupe Year of the Dragon 88 Special Edition ahead of the LA Auto Show.
Photo: AFP

by
JULIA WERDIGIER

In one of the more dramatic scenes in Skyfall, the latest James Bond movie, a vintage Aston Martin car goes up in flames when an estate in the Scottish countryside comes under attack by the villains.

Away from the big screen, however, the British car maker seems to be in real trouble.

Moody’s Investors Service, the debt-rating agency, put Aston Martin’s debt and probability of default rating on review for a downgrade on Friday. The rating agency cited the company’s lower cash levels ahead of an interest payment in January as the reason.

“The review was prompted by a significant deterioration in Aston Martin’s liquidity profile as per end September 2012, caused by a much weaker cash generation and operating performance in the third quarter than anticipated by the company and compared to Moody’s expectations," Falk Frey, a Moody’s analyst, said in a statement.

Grace Barnie, a spokesperson for Aston Martin, declined to comment on the Moody’s report.

The British luxury car maker, which is controlled by Kuwait’s Investment Dar Co, could use some of the success enjoyed by its most famous owner. The latest James Bond movie is already one of the highest grossing Bond movies of all times.

Aston Martin said Thursday it was in advanced talks to raise funds by selling new shares to investors. Moody’s said such a capital increase would improve the company’s position and ability to pay the £14 million in interest due in January.

A lack of funds has been keeping Aston Martin from investing in new technology and developing new models. The company was sold by Ford Motor in 2007 and remains one of the few independent car makers in an increasingly competitive industry.